IMF Says Sri Lanka’s Progress Is ‘Tremendous’ & Electricity Tariff Revision Under Review

COLOMBO (News 1st); As Sri Lanka continues its path toward economic recovery, the country’s leadership is expressing hope that the current International Monetary Fund (IMF) program will be its last.

In a recent statement, the President of Sri Lanka suggested that the ongoing Extended Fund Facility (EFF) could mark the final chapter in the nation’s long history of IMF assistance, signaling a move toward financial independence.

During a press briefing, News 1st’s Zulfick Farzan posed a direct question to the IMF regarding the feasibility of this goal and the status of the next review under the program.

Julie Kozack, Director of the IMF’s Communications Department, responded with cautious optimism, acknowledging the significant strides Sri Lanka has made in recent months.

“Sri Lanka has made commendable progress in implementing some very difficult and much-needed reforms,” Kozack said. “These efforts are really starting to bear fruit.”

She pointed to several key indicators of recovery: a strong rebound in economic growth, low inflation, rising international reserves, improved fiscal revenue collection, and a nearly completed debt restructuring process. These developments, she noted, reflect the “tremendous progress” made by the country since the height of its economic crisis.

However, Kozack emphasized that the journey is not yet over. “It is going to be critical for Sri Lanka to sustain the reform momentum through the remainder of the EFF program,” she said, underscoring the importance of continued commitment to structural reforms.

In addition to economic reforms, governance has emerged as a key focus area. Kozack revealed that in late February, the Sri Lankan government published an updated action plan on governance reforms. This plan includes commitments to enact a public procurement law and an asset recovery law, among other measures aligned with the IMF’s governance diagnostic report.

“These are important steps,” Kozack said, “and they reflect the government’s commitment to transparency and accountability.”

“The program and Sri Lanka’s ambitious reform agenda continue to deliver commendable outcomes.”

According to Kozack, overall performance under the program remains strong, and the government has demonstrated continued commitment to the agreed objectives. However, the completion of the review is still pending approval by the IMF’s Executive Board and is contingent upon the fulfillment of certain prior actions.

Among the key measures under review are two significant steps taken by Sri Lanka’s energy regulator on June 11th: a 15% increase in electricity tariffs and the publication of revised guidelines for the bulk supply transaction account. These actions are part of the structural benchmarks required for the release of the next tranche of IMF funding.

“The IMF team is closely engaged with the authorities to assess these measures,” Kozack said. “Once the review is completed by our Executive Board, Sri Lanka will have access to approximately 344 million U.S. dollars in financing.”

While the exact date for the Executive Board’s decision has not yet been announced, Kozack confirmed that it will be made public in due course.